GrowGeneration Corp.

Hello, everyone, and welcome to Grow Generation's third quarter 2024 earnings conference call. My name is Lovely, and I will be your operator for today's call. At this time, participants are in a listen-only mode. Following prepared remarks, we will open the call to questions from analysts with instructions to be given at that time. This conference call is being recorded, and a replay of today's call will be available on the investor relations section of Grow Generation's website. I will now hand the call over to Phil Carlson with KCSA for introductions and the reading of the Safe Harbor Statement. Please go ahead.

Thank you and welcome, everyone, to Grow Generation's third quarter 2024 earnings results conference call. With us today are Darren Lampert, co-founder and chief executive officer, and Greg Sanders, chief financial officer of Grow Generation. The company's third quarter earnings press release was issued after the market closed today. A copy of this press release is available on the Investor Relations section of the Grow Generation website at ir.growgeneration.com. I would like to remind everyone that certain comments made on this call include forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to several risks and uncertainties. that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC for a detailed discussion of the risk that could cause actual results to differ materially from those expressed or implied in any of the forward-looking statements made today. During the call, we used some non-GAAP financial measures as we described business performance, the SEC filing, as well as the earnings press release, which provide reconciliations of non-GAAP financial measures Most directly comparable gap measures are all available on our website. Following prepared remarks, management will be happy to take your questions. We ask that you please limit yourself to one question and one follow-up. If you have additional questions, please re-enter the queue, and we will take them as time allows. Now, I will hand the call over to GrowGeneration's co-founder and CEO, Darren Lampert. Darren, please go ahead.

Thanks, Philip, and good afternoon, everyone.

We appreciate you joining us today. as we report our third quarter performance. I'm pleased to share that our results were consistent with our internal expectations, reflecting the solid progress we've made under our restructuring plan. In particular, we met our targets with store closures and exceeded our targets for proprietary brand and same store sales performance, all of which I will provide details on shortly. Throughout the quarter, we remain focused on driving operational efficiency enhancing our product offerings, and positioning growth generation for sustainable growth as we look towards 2025. Our entire team's commitment has been instrumental, and I want to extend my thanks to them for their hard work and dedication. We believe that the foundational improvements we're making today will not only strengthen our current performance, but will also serve as a springboard for our growth initiatives. with an emphasis on high-margin proprietary brands, digital expansion, and a leaner, more efficient retail footprint. Our third quarter results included net revenue of $50 million, slightly down from $53.5 million in the second quarter of 2024, as we had anticipated, due to store closures as part of our restructuring plan. We are balancing our focus on profitability as we execute on our key growth initiatives. These actions are positioning GrowGen for profitable, sustainable revenue growth. They should enable us to increase sales in high-growth areas with our commercial and B2B customers as we enhance margins and optimize efficiencies across our organization. We are pleased with our progress and believe these actions will improve profitability and reduce expenses by a minimum of $12 million on an annualized basis. I'll briefly recap the three major components of our restructuring plan that we announced during the third quarter, which are, one, a focus on proprietary brands with goals of adding approximately 50 new products to our proprietary brand lineup over the next 12 months. And for these brands to account for 35% of total sales, by the end of 2025. Further, we continue to focus on preferred partners who bring best of breed products to our customers. Two, the digital transformation of sales throughout our entire organization with a B2B customer focus. This includes launching a B2B e-commerce portal, which we expect to launch in the fourth quarter. Three, and continuing to streamline our operations and right-sizing GrowGen's retail footprint to align with current market dynamics. We expect to retain the majority of our commercial customers to adjacent locations, our commercial sales force, and the B2B portal. We've been making substantial progress across all these areas. As previously stated, the plan included closing 19 stores, in order to prioritize our best-performing locations, serving higher customer volumes. When we last spoke, seven store closures had already occurred. Since that time, the 12 additional stores we noted have also been closed. As of today, the company retains 31 operational stores. Digging a little deeper into our third quarter results, we want to highlight that our same-store sales grew by 12.5%. It is of paramount importance to note this marks the first quarter of positive same-store sales in three years. We think this growth shows the high performance of our core store locations and reinforces the rationale behind our restructuring plan. Our third quarter results also display the strength of our proprietary brands. As a percentage of cultivation and gardening net sales, Proprietary brand sales grew to 23.8%, up from 19.4% last year. This growth was mainly driven by several new product launches during the quarter. Our strong performing proprietary brands and a consistent pipeline of innovative new products were on track to reach our target of proprietary brands comprising 35% of total sales by the end of 2025. This growing portfolio of proprietary offerings is central to our profitability strategy, enabling us to provide differentiated, high-value products that meet customer needs and contribute to stronger margins for growth generation. As part of our strategic transformation, we're fully embracing a digital-first approach across our sales channels with a strong focus on our B2B customers. This quarter, we made substantial progress on launching our new B2B e-commerce portal, which is set to go live in the fourth quarter. This platform will serve as a central hub for our commercial clients, enabling them to seamlessly place orders online, view real-time inventory availability, and access tailored product recommendations and pricing, all designed to simplify and streamline their purchasing experience. As we finish the year and move into 2025, we will further sharpen our focus on profitable growth and maintaining a strong balance sheet. Our cash position remains very solid, with $55.2 million and no debt as of September 30, 2024. Our no-debt position and strong cash reserves reflect our financial resilience. We also repurchased an additional $1.8 million of stock during the third quarter as we continue to believe our equity has compelling value. Moving on to guidance, we are reiterating our full year 2024 estimate of net revenue between $190 to $195 million. We continue to review our outlook for adjusted EBITDA in light of our ongoing restructuring actions and the resulting cost savings we anticipate. We will have greater visibility when we close our full year results and expect to provide full year 2025 net revenue and adjusted EBITDA guidance on our year-end earnings call. I would now like to provide a brief update on MMI, our storage solutions business. As we have previously discussed, we believe there is a significant opportunity to further monetize this business. Lake Street Capital is currently assessing strategic opportunities related to MMI, and we are in the process of receiving and reviewing bids. The process is ongoing, and we will provide any further updates when appropriate. To summarize, our third quarter results were consistent with our expectations and show the progress of restructuring measures. Progen is strategically positioned in the evolving cannabis industry, especially with the upcoming rescheduling discussions a new leadership pro-cannabis stance to capitalize on industry growth opportunities. I will now hand the call over to our CFO, Greg Sanders.

Greg? Thank you, Darren, and good afternoon, everyone. We are pleased to report that our third quarter results were in line with guidance as we continue to execute the plan. As I will cover in depth, same-store sales growth, reduction in expenses, And the improvement in proprietary brand sales demonstrates the alignment of our results to our strategic priorities. Starting with third quarter sales, net revenue was $50 million compared to $55.7 million in the year-ago period, a decline of 10.2% primarily attributed to 25 store closures in the trailing 12 months. Sequentially, revenue declined 6.6% from $53.5 million last quarter. The company closed and consolidated an additional 12 retail stores in the third quarter, which had an impact on overall sales. We could not be more satisfied to report that our third quarter same store sales metric increased by 12.5% year over year. For GroGen, this marks the first quarter of positive same store sales in three years. We saw continued improvements in our business within Michigan, Oregon, and California markets, and observed challenges in Oklahoma and Maine. Relative to the strength of the third quarter, same-store sales turned positive for the full fiscal year to date through September 30th. Cultivation and gardening net sales were 41.4 million for the third quarter of 2024, compared to 48 million for the comparable year-ago period. Proprietary brand sales increased to 23.8%, of cultivation and gardening sales for the third quarter of 2024, compared to 19.4% for the third quarter of 2023, a 4.4% improvement. This was driven by continued market adoption of our proprietary brands, including Charcor, Drip Hydro, and The Harvest Company. We remain laser focused on delivering 35% of sales in 2025 to be driven from our proprietary brands. For the third quarter, the percentage of consumable product net sales in the cultivation and gardening segment generally remained flat at 73% to the prior year, which we view as a positive indicator of stability. Net sales of commercial fixtures within our storage solution segment increased by 12.9% to 8.6 million for the third quarter of 2024, compared to 7.6 million from last year's third quarter. This increase was largely due to timing of revenue recognition on various large projects. Gross profit margin was 21.6% for the third quarter of 2024 compared to 29.1% for the third quarter of 2023. Within margin, we incurred a 381 basis point impact from inventory costs, closed store liquidation sales, and freight expenses related to the closures of 12 retail stores in the period. In addition, we incurred a 227 basis point impact from heavily discounted sales of discontinued inventory in Q3, which also contributed to our ability to reduce inventory by $12 million in the period. Within our restructuring initiatives, we are revising our product mix to align the business to execute to 35% proprietary brand sales for next year. We expect that this initiative, which will carry into the fourth quarter, will have an impact on fourth quarter margin as well, but will allow the business to report a sustainably higher gross profit percent in 2025. Another area worth noting is that we continue to realize steady improvements in expenses as a result of our strategic rationalization efforts. Store and other operating expenses in the third quarter declined 13.9% to $10 million, compared to $11.7 million in the third quarter of 2023. Meanwhile, selling, general, and administrative expenses for the quarter were $7.4 million compared to $7.6 million in the third quarter of 2023, a 2.3% improvement. While SG&A was slightly up from the second quarter of 2024 of $7.1 million, this was largely due to expenses related to severances and other restructuring costs to further optimize our operating model. We expect to communicate additional cost improvements in Q4 as we position the business for 2025 and beyond. Depreciation in amortization was $5 million for the third quarter of 2024, compared to $3.6 million in the second quarter of 2024. This increase is due to acceleration of certain depreciable assets from our restructuring initiatives through year-end, for which we expect to retire said assets at December 31st. In addition, we recorded a $220,000 impairment, which was fully related to leases of closed stores in the third quarter. Net loss was $11.4 million for the third quarter of 2024 for negative $0.19 per share, compared to a net loss of $7.3 million for negative $0.12 per share in the third quarter of 2023. Adjusted EBITDA, as defined in our press release, was negative $2.4 million compared to negative 0.9 million in the same period last year. Turning to the balance sheet, as of September 30, 2024, the company had $55.2 million of cash, cash equivalents, and marketable securities and no debt. During the quarter, we utilized $1.8 million to repurchase company shares. We continue to maintain a strong cash position and do not foresee any near-term financing needs. As Darren mentioned, we are reiterating our full-year 2024 guidance for net revenue to be in the range of $190 to $195 million. We expect to provide full-year 2025 guidance for net revenue and adjusted EBITDA on our 2024 year-end conference call. In closing, the financial position of Grow Generation remains strong. We made significant progress towards restructuring the business for long-term profitability in the third quarter. Our primary focus is long-term margin expansion, cost reduction, and generating opportunities for positive top-line growth. We are dedicated to growing the business on a more sustainable and leaner footing, enabling us to deliver profitable growth for our shareholders. I will now turn the call back over to Darren for closing remarks.

Thank you, Greg, and thank you to everyone for joining us today.

As we wrap up our third quarter call, I want to emphasize our excitement and confidence in Grow Generation's path forward. The progress we've made through our restructuring efforts have put us on a stronger footing to drive revenue growth, optimize margins, and build a leaner, more profitable company. Our focus on expanding high-margin proprietary brands Advancing our digital transformation and streamlining our retail footprint is already showing results, and we're committed to maintaining this momentum into 2025. Our entire team remains dedicated to executing on this strategic plan, and I'm deeply grateful for their hard work and adaptability as we position Grow Generation for long-term success. I'd also like to thank our investors for their continued support and confidence in our vision. We're excited to deliver meaningful value to our shareholders by building a more resilient and sustainable business. We look forward to keeping you updated on our progress as we move into the new year. That concludes our prepared remarks.

Operator, please open the line for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Brian Nagle from Oppenheimer. Your line is now open. Please go ahead.

A couple questions, if I could.

First off, I guess just numbers. You talked about the kind of ongoing rationalization of the store base. Could you remind us where you want to get to and when that will be done? And then my second question, I guess, is bigger picture. But, Darren, with respect to the continued build-out, roll-out of proprietary brands, which seems like it's happening quite quick, How could you maybe talk about the performance as you're adding these new brands? How is the sales performance of the new brands added versus maybe some of the legacy brands? Are they in customer base or are you introducing products that appeal to different customers? Thank you.

Yeah, I can start, Brian. We have 31 stores right now. So we're down from about 65 stores. We've closed 19 stores this year. And when you look, you know, year over year, we're down 25 stores. I think we're at a pretty comfortable spot right now at this 31. Not to say that we may not close a couple more stores next year. You know, GroGen has, you know, has changed tremendously as we evolve in the industry. You know, GroGen is now a go-to name right now for most cultivators. So the amount of stores is certainly not necessary around the country as we build out distribution. and we build out our B2B network. So we're comfortable right now. We're able to service our customers around the country right now, you know, from our locations, certainly our bigger locations. But I do believe you'll see a couple more store closings next year, but that'll probably be the whole nine yards of it. With regards to private label, you know, GrowGen has spent the last three years, you know, through R&D and testing products within cultivation around the country. What you're starting to see right now is everything coming together. It takes six months to a year with certain of these products just going through testing in certain facilities to get some of our customers to either switch or adopt these different products that we're bringing to market in different sides of the industry, whether it be on the nutrient side of it, which is feeding the plant on the on the soil side of it, on the lighting side of it, and Harvest Co., which is a new brand for us, really on the picks and shovels side of it and really on the ancillary side of it. And we're just giving our customers more optionality. So what you're seeing right now is both our customers adopting some of our products, and also we're also selling it into distribution. So I think you're seeing sales increasing from both ends. But when you start looking at the margin picture for GrowJet, you know, you're looking at products that are, you know, that GrowJet is, you know, 40% margin business, really opposed to some low 20s on a lot of the other products we're selling. So we do believe going into 2025 that you start seeing a balancing of our margins that should land in the high 20s to low 30s, especially when we're looking at 35% of our, you know, of what we believe is sales next year. will be private label products. But with that also, we continue to work with the best of breed distributors, manufacturers out there, you know, and working very closely with our partners, selling their brands to our customers. So, you know, we've always said that GrowGen gives a choice. And, you know, our products are not always the choice for some of our customers. And, you know, we sell to our customers what they're looking for. So we keep a very open eye, you know, you know, with what we sell.

Thanks, Jared. I appreciate all the color. Thanks, Brian. Have a good evening.

Your next question comes from the line of Aaron Gray from Alliance Global Partners. Your line is now open. Please go ahead.

Hi, good evening, and thanks for the question. First question for me, I just wanted to hear more in terms of all your efforts to build out the commercial business, increasing your sales with some of the larger players, the MSOs. That sounds like there's still a lot of white space opportunity, so any color you could give on that initiative would be helpful there. Thank you.

Yeah, Aaron, I think there's a tremendous amount of opportunity, and I think as this industry grows up and evolves and gets more commercialized in a lot of ways, You know, GrowGen becomes a go-to, you know, whether it's accounting, whether it's credit, whether it's product, whether it's distribution. You know, we've built a network around the country right now where we sell best of breed products, albeit either GrowGen products or our vendor products. But on the other side of it, you know, we have, you know, a very vibrant software system at GrowGen, accounting systems. We give credit to all our customers. So it's just, again, it's making it easier for our customers to shop. And I think that's what it's about in this day and age, getting products to our customers, you know, in a timely fashion, best pricing, with credit, and just making their jobs easier. Our accounting department consolidates their bills from facility to facility. You know, when we work with our customers, like anything else, we have a very big balance sheet. We have $55 million of cash on our balance sheet. Right now we have the largest inventory positions in the industry. So the plants never sleep and, you know, our customers don't sleep. And, you know, like anything else, we're there 24-7, you know, to fill orders and do what we can for our customers. On the other side of it, we have an extremely talented commercial team at Growjet. You know, our commercial team is at the facilities on a daily basis. answering questions about new products coming to market, helping out if there's issues within the grow facilities. So it's not only that we're selling products to our customers, we're also helping them grow. We're helping them with yield. We're helping them with quality through innovative products or, again, you know, our partners' products. But, again, you know, we have a team at GrowGen that I believe is part of the industry right now.

Okay, great. Appreciate that call there, Darren. Second question for me, I know you touched briefly on private label. It seems to perform well for you, 24% of sales. So can you just break down in terms of as we think about where it is now, getting to that 35%, you said new products and expanded distribution. Could you help us maybe quantify the drivers? How much of that should we think about being driven by the new products and innovation that you guys have going versus just the legacy SKUs continuing to drive growth there and higher mix of sales? Thank you.

I think it's a combination of both, Aaron. You know, again, we don't really look at it as legacy SKUs. Most of our SKUs are still growing. So there's not much legacy within it. Most of them have come to market in the last few years that are really driving sales, except for Charcor. But Charcor is coming out with innovative products, whether it's a 70-30 cocoa prolate mix right now. And you're also seeing cocoa coins. And, you know, as we told you, as we've been talking about, Drip powders come to market at the beginning of the year that are starting to grow very quickly. And also hard kill. So I think you're seeing growth in our products that have been out for a few years, but you're also seeing new products come into market. So I think you'll see a mix. You know, we don't believe that products that we've lost in a couple years are stagnating. I think they're all still growing. I think you'll see a nice number within the fourth quarter on growth of our private label division. It's tracking, you know, much higher than it was last quarter. So we believe that 35% is attainable next year. And from there, you know, we still do believe that you may see it in the 40s a couple years later. So again, we couldn't be any more excited with where we are on the private label products. I think it certainly helps with sales. Our commercial division is out selling it. We have individuals that go to facilities, as I said earlier to Brian, facility managers and facilitators. And so, you know, we're out there right now. And I think you know more than any how hard we're working, you know, on the business. And, you know, we spent the last three years, you know, restructuring Growjet, you know, albeit closing, you know, close to 40 stores, you know, 35 stores, half our stores, and really building what we believe is a wave of the future. So 2025, we believe, will be a tremendously different year than 2024.

Okay, great, Keir. Thanks for the call, and I'll go back into the queue. Thank you, Aaron.

Your next question comes from the line of Eric Deloyer from Craig Hallam Capital Group. Your line is now open. Please go ahead.

Great. Thank you for taking my questions, and congrats on all the restructuring progress and very nice same-store sales growth here. My questions are on the B2B portal. First one, just kind of high level. I mean, you know, I know that you've sort of discussed this B2B portal a few times already, but just wondering if you could maybe expand a bit more on what's new here from your previous e-commerce capabilities. I mean, is this more of like a centralized or company-wide approach to inventory availability and pricing and overall a more simplified approach? And I guess ultimately what I'm getting at is, should we be thinking of this B2B portal as more of a gross margin expansion initiative, or are there some incremental revenue opportunities that you see by adopting this portal?

I think it's both, Eric, and we've worked quite hard on it. We're opening it up just to our commercial customers to start with. It will give them individual pricing. Again, a lot of our customers have different pricing schedules for different products, So you'll have pricing on it, you'll have availability. You know, right now, you know, when individuals want to order our commercial customers, they go through our commercial team. And it's very manual, hand-driven. And so it's really going to a portal right now that's going to take pressure off of our staff. They'll know where the products are. They'll know what the pricing is. So it'll give our staff much more time to go to facilities, to work with our customers, to look for new customers. So we believe that that's the wave of the future like anything else. The industry is maturing tremendously, and it's something that's needed. I mean, it's nothing different than you see in most industries. Individuals usually don't order through commercial salespeople. They go online and they order unless they have questions, and they all have their direct salespeople. So I believe it's ease of use. It's finding different products that they need. And it's just giving GrowGen way more color on the other side of it. We know what's coming in, so we know what products to properly stock, where to have these products. It's GrowGen 2.0. And it should increase margins for us because the products will be in the places we need it. The shipping will be much easier. And I think the customers, again, will enjoy it much, you know, it'll be much easier for our customers to order Transact business. On the other side of it, what we're also doing is we're also starting to open up B2B portals for individual products, you know, for any size growers. So opposed to having, you know, going online and looking through You know, websites, they can go direct websites where they'll learn how to use our products. They'll be teaching, you know, teachings to our customers. And it will also open up, you know, again, individual products to many other growers within the country.

That's all very helpful, Kohler.

In terms of the margin opportunity with this B2B portal and, you know, I guess GrowGen 2.0 here, If we think of that versus the more traditional brick-and-mortar business, how should we think about the potential difference in margin? Obviously, I know you guys haven't launched this yet, so I'm not looking for an exact number, but if you can kind of help us understand maybe a reasonable range, whether that's on a gross margin or even on a margin basis, however you want to take it. Just wondering if you can help give us a bit more color of kind of what you're anticipating. from a margin perspective with this B2B portal?

Yeah, I think more on the margin side, you're going to see cost savings both to our customers and to Progen. You know, manual, you know, again, we need more employees to do things manual than we do by, you know, by portals. So I think, you know, products will be selling for the same price, whether individuals are coming into the stores or shipping them out of our warehouses. So it's still to be determined. But once again, with dealing with Grow10 products, you know, our proprietary brands as opposed to other brands, you know, the margins are certainly higher. You know, they're in the 40s as opposed to, you know, whether it's in the 20s or teens. So you'll see a balancing of margins going forward that we believe in 2025 will be, you know, whether it's the high 20s or low 30s. And I think that, you know, if you unpack our margins, you know, in the third quarter, Again, we sold through $12 million of products in the third quarter, bringing inventory down tremendously and selling a lot of products at a loss during the quarter, really to rationalize our inventory to get it ready for 2025 with all these store closures.

All right. Thanks for the call, Eric, and congrats again on the progress. Thank you, Eric.

Just a reminder before we proceed, if you wish to ask a question, please press star one. And the next question comes from the line of Mr. Mark Smith from Lake Street Capital Markets. Your line is now open. Please go ahead.

Hi, guys. Darren, first question for me is just around customer retention from the closed stores. Any idea of how much you were able to retain and is that what really helped drive some of the comp? Is customer shifting over to these stores that are still in the comp base?

I think it certainly is, Mark. You know, what we always said to Wall Street is we believe that we will retain a majority of the commercial customers, certainly not walk-ins. But one of the reasons that we're opening these portals is for the walk-in customers, you know, in stores that we clubbed. that we will shift to them and make their lives much easier. But we are starting to retain customers from store closures. You know, 12.5% same-store sales in the third quarter was certainly a nice surprise for GrowGen. It was off a very weak quarter last year, but we believe that same-store sales growth will continue. You know, we do believe that we are starting to see a very small turn in the industry right now, whether, you know, especially at GrowGen. So, you know, we look forward to, you know, getting the restructuring behind us. We still have another couple months, and we believe that, you know, we should have most of it complete by the end of the year. So we look forward to really sharing our progress in 2025. You know, we did close all nine stores. You know, we did close, I mean, all 12 stores, you know, within a three-month span, and 19 stores in the last, you know, last six months. So we've been pretty hard at work, but we are starting to retain customers. They are buying our brands, and we feel pretty comfortable where we are right now with saying to ourselves on a go-forward basis.

Perfect. And a follow-up to that, and you kind of hinted and talked about it a little bit, which is just trying to get a feel for the health of your customers and kind of spending habits, you know, commercial and walk-in. today, kind of, you know, how do you feel like your customers are doing? Are we seeing investments back into, you know, operations and grow operations here? Anything that you can give us as to what you're seeing in the health of the industry today?

You know, the positives are receivables. You know, we're collecting our receivables. We're also, you know, are increasing receivables, but having very little issues with getting paid in certain areas. So, you know, that's always a positive for GrowGen, as you can see. You know, we haven't taken, you know, we haven't wrote enough money to receive. We're pretty conservative in ways, but, you know, with longstanding customers, you know, we always try to help. You know, the industry is tough. There's been very little money raised in the last couple years. You know, we're still looking forward to, some positive news from, you know, from the government. It's been extremely tough sledding when it comes to that. Every time you think, you know, you believe things are turning on a legislative front, they don't. But, you know, President-elect Trump has said that, you know, he believes on a state by state and that he will change the laws. And, you know, we look back at the last four years under the democratic regime and nothing has gotten done. So, you know, we're cautiously optimistic in a lot of different ways. You know, we do believe that it'll bring money back into the industry, whether it's to save back, whether it's rescheduling, whether it's, you know, the government staying out of it and leaving it state by state. So, you know, we have, if you ask me, you know, it's been very tough sledding out there. I think we've navigated it wonderfully. We've kept our, you know, we've kept our balance sheets, you know, in a great place to go forward. certainly not happy with the price of the stock right now. But, you know, we certainly believe that performance will take care of that, you know, down the road. So, you know, we just finished our share repurchase. We just bought back $6 million of stock. We believe that our stock was trading at a point where, you know, that it didn't make much sense. So, again, we finished the year very optimistic of what we've done in the last couple of years and where we're going in the future.

Excellent. Thank you.

There are no more questions at this time. Please continue, Mr. Darren Lambert.

Well, thank you for joining us today. We look forward to updating you on our progress on our year-end call. I wish all our shareholders and employees a happy and healthy upcoming holiday season. Thank you for attending today. We look forward to closing the year and starting 2025 with stress.

Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.